India’s cenbank gives lenders until end of November to comply with new digital rules

A Reserve Bank of India (RBI) logo is seen at the entrance to its office in New Delhi, India November 9, 2018. REUTERS/Altaf Hussain

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BENGALURU, Sept 2 (Reuters) – The Reserve Bank of India (RBI) has given lenders until the end of November to put systems and processes in place to ensure existing digital loans comply with the regulator’s rules published last month .

In August, the RBI set out detailed guidelines that would increase scrutiny and oversight of digital lending apps and the lenders that engage with them, after several malpractice complaints. Read more

The central bank has required that all digital loans be credited directly to borrowers’ accounts rather than through a third party. Certain categories such as co-lending agreements and loans for specific end uses are exempt from the new rules.

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Arrangements where non-banks assumed some of the risk of digital lending have effectively been terminated.

The rules are applicable to new customers as well as existing customers with new loans, the RBI said in a notification on Friday. (https://bityl.co/EAIM)

The central bank has advised lenders to ensure that service providers and the digital apps associated with them adhere to the guidelines.

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Reporting by Chris Thomas in Bengaluru; Editing by Andrew Cawthorne

Our standards: The Thomson Reuters Trust Principles.

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